Posted on: 11th Jul, 2010 10:48 am
I'm in a bad loan, made in March, 2006... My wife & I purchased a home in Oceanside, CA for $370,000 in March 2001, and needed a 100% LTV loan for that purchase, as we used all profits from prior sale to wipe out other remaining debt. In Dec 2001, I lost my job d/t contract change. I opened my own practice in Jan 2002 and secured a $100,000 corporate loan to finance it.
Then on March 8, 2002, I fell & broke my hip; was disabled x 7 months. That corp loan went to pay basic necessities vs. corp startup costs. Cash flow was very difficult for several years. MY AGI went from over $120k in 2001, to just over $7k in 2002, and $36k in 2003, etc. By 2004, we were in default on several credit cards and the corporate loan. Two attornies advised against bankrupcy then, and advised me to 'do the best you can'. Legal battles ensued naturally.
I refinanced my house in March 2006. The appraised value had risen to $725,000! I refi'd at $580,000 in order to pay off the vast majority of my delinquent debts. That loan is a 30/40 ARM, and is at 7.375%, which was supposed to have adjusted (likely downward a year ago) but the lender froze the interest rate for 4-5 yrs. My monthly payment is $4168.40 (P&I and Property Tax) (I pay insurance separately.) That payment is 52.6% of my take home pay from my job. (I receive anothr $1750/mo gross on an independent contract situation, but after expenses and taxes, there's not much left on that. However, if you include that as 'income', my mortgage pmnt = 43% of 'take home'.)
We have cut expenses. We have no finanical flexibility, and are slowly falling behind each month, but, since I've made my mortgage a priority, we are current on the mortgage. We need a rate reduction or other loan mod, but our lender (America's Servicing Co) is so back-logged, they won't even talk with us because we're 'current'. We're in a 'catch 22' situation because we're honest and paying our debts. We drive small, used cars, and don't take vacations. To top it off, we've done some upgrades, but presently, our house is in no shape for sale, and according to Zillow.com, our estimated value is abou $480,000-$490,000. What can we do? What are our options?
Then on March 8, 2002, I fell & broke my hip; was disabled x 7 months. That corp loan went to pay basic necessities vs. corp startup costs. Cash flow was very difficult for several years. MY AGI went from over $120k in 2001, to just over $7k in 2002, and $36k in 2003, etc. By 2004, we were in default on several credit cards and the corporate loan. Two attornies advised against bankrupcy then, and advised me to 'do the best you can'. Legal battles ensued naturally.
I refinanced my house in March 2006. The appraised value had risen to $725,000! I refi'd at $580,000 in order to pay off the vast majority of my delinquent debts. That loan is a 30/40 ARM, and is at 7.375%, which was supposed to have adjusted (likely downward a year ago) but the lender froze the interest rate for 4-5 yrs. My monthly payment is $4168.40 (P&I and Property Tax) (I pay insurance separately.) That payment is 52.6% of my take home pay from my job. (I receive anothr $1750/mo gross on an independent contract situation, but after expenses and taxes, there's not much left on that. However, if you include that as 'income', my mortgage pmnt = 43% of 'take home'.)
We have cut expenses. We have no finanical flexibility, and are slowly falling behind each month, but, since I've made my mortgage a priority, we are current on the mortgage. We need a rate reduction or other loan mod, but our lender (America's Servicing Co) is so back-logged, they won't even talk with us because we're 'current'. We're in a 'catch 22' situation because we're honest and paying our debts. We drive small, used cars, and don't take vacations. To top it off, we've done some upgrades, but presently, our house is in no shape for sale, and according to Zillow.com, our estimated value is abou $480,000-$490,000. What can we do? What are our options?
Welcome jbmd,
It is true that lenders will not be ready to provide you with a loan modification if you are current on your mortgage dues. Lenders generally offer this option when you are 2-3 months delinquent on your payments. However as you're facing hardship, you should contact your lender and apply for a modification of the loan again. You need to convince the lender about your situation so that he agrees to provide you with a repayment plan which will suit your purpose.
It is true that lenders will not be ready to provide you with a loan modification if you are current on your mortgage dues. Lenders generally offer this option when you are 2-3 months delinquent on your payments. However as you're facing hardship, you should contact your lender and apply for a modification of the loan again. You need to convince the lender about your situation so that he agrees to provide you with a repayment plan which will suit your purpose.
Adonis gave good advice - keep on trying. Sooner or later you'll get someone sympathetic to your situation.
